Welcome to our guide on the Financial Crimes Enforcement Network's (FinCen) latest regulations. If you're involved with a business, it's important to understand these new rules and how they might affect you.

Updated 8/1/2024: Recently, FinCEN released a Notice to Customers: Beneficial Ownership Information Reference Guide concerning the updated beneficial ownership rules. Understandably, many businesses are wondering why they need to provide the same information to both FinCEN and their bank. To address these concerns, the guide includes a side-by-side comparison on page 2, detailing the specific information collected by each entity. 

FinCEN Alert: FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act. The fraudulent correspondence may be titled "Important Compliance Notice" and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. Please do not respond to these fraudulent messages, or click on any links or scan any QR codes within them.

What’s New?

FinCEN has introduced new rules to help prevent illegal activities like money laundering and financial fraud. These rules focus on the "beneficial owners" of companies. So, who are these beneficial owners? They're the people who actually own or control a company, even if they're not listed on the business papers.

  • In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.
  • The reporting rule requires certain entities to file beneficial ownership information (BOI) containing information about the entity itself and two categories of individuals; beneficial owners and company applicants. o In general, beneficial owner is an individual who owns or controls at least 25 percent of a company or has substantial control over the company, and a company applicant is an individual who directly files or is primarily responsible for the filing of the document that creates or registers the company.

What You Need to Do

Identify Beneficial Owners:

  • A beneficial owner is any individual who, directly or indirectly: Exercises substantial control over a reporting company OR owns or controls at least 25 percent of the ownership interests of a reporting company.
    See Substantial Control Indicators and Ownership Interest Charts (charts 3 & 4) within Small Entity Compliance Guide for details.
  • You'll need to provide certain details, like your name, address, date of birth, and an ID number.

Report to FinCen:

  • Companies need to report their beneficial owners to FinCen. This means filling out forms and keeping your information up to date.
  • If your company existed before January 1, 2024, it must file its initial beneficial ownership information report by January 1, 2025.
  • If your company was created or registered on or after January 1, 2024, and before January 1, 2025, then it must file its initial beneficial ownership information report within 90 calendar days after receiving actual or public notice that its creation or registration is effective.
  • Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports.
  • If there is any change to the required information about your company or its beneficial owners in a BOI report that your company filed, your company must file an updated BOI report no later than 30 days after the date on which the change occurred.
  • There are 23 categories of entities exempt from reporting within the small entity compliance guide.
  • The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.

Information to Report:

  • Chart 7 – Required Information Checklists includes information to be collected and reported.
  • FinCEN’s filing system is currently under development and will not be available until January 1, 2024. FinCEN will publish instructions and other technical guidance on how to complete the BOI report form. This guidance will be available at: www.fincen.gov/boi.

    Reference Materials:

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